Dallas Fed's Logan Urges Modestly Higher Rates as Inflation Still Runs at 3.5%
Updated
Updated · CNBC · Jul 16
Dallas Fed's Logan Urges Modestly Higher Rates as Inflation Still Runs at 3.5%
3 articles · Updated · CNBC · Jul 16
Summary
Lorie Logan said the Fed should move interest rates modestly higher, arguing one favorable inflation report is insufficient to restore price stability and protect households.
June consumer prices fell 0.4% and wholesale prices slipped 0.3%, but Logan said annual inflation remains too high at 3.5% for consumers and 5.5% for producers.
The Dallas Fed chief, a 2026 FOMC voter, warned inflation has stayed above the 2% target since early 2021 and could require sharper hikes later if it becomes entrenched.
Markets already price in a quarter-point increase later this year, though traders see just 12.3% odds of a hike at the Fed's July 28-29 meeting.
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Overview
Dallas Fed President Lorie Logan has become a leading hawkish voice, warning that the central bank may need to raise interest rates further due to persistent inflation and a strong economy. Her stance is based on a careful review of inflation metrics, especially those that remove volatile prices. Logan is concerned that the Dallas Fed’s trimmed mean inflation measure might be understating real inflation because of technical issues, suggesting that inflation could be more deeply rooted than it appears. This view supports her readiness to tighten monetary policy if needed, highlighting the ongoing debate within the Federal Reserve about how best to achieve price stability.